By David Callaway, Callaway Climate Insights

Solar stocks, for better or for worse, have become enslaved to political risk. Concerns about trade tariffs, local net-metering regulations, and government inaction have bounced solar company’s shares around like ping-pong balls in the past six months.

This week, investors woke to the news of President Joe Biden’s executive order suspending new tariffs on panel imports from much of Asia (except China) for the next 24 months, causing shares to soar. The Invesco Solar ETF (TAN) rose more than 4%. Shares of Enphase Energy (ENPH) rose more than 5% while shares of SunPower Corp. (both of which we hold small positions in) rose almost 3%.

But the administration did not call off the Commerce Department’s probe of dumping of panels by China through some of these other countries, such as Vietnam and Thailand, which has been the main culprit in holding solar stocks back this year. As long as that probe hangs over the industry, with the potential it carries for retroactive tariffs, the industry can’t really build on good news like the Biden order.

Solar companies in the U.S. last quarter reported their worst quarter since the beginning of the pandemic, with installations dropping 24% from the same quarter a year ago, according to the industry’s trade group.

Solar power may be the fastest growing renewable power source, but it currently still only accounts for less than 5% of U.S. electricity usage. Until political risk is taken out and the industry’s entrepreneurs allowed to build and connect to the grid, it’s hard to see growth that really will get investors’ attention.

More insights below . . . .

Latin America highlights why now may be the time to invest in ESG funds

. . . . ESG funds have been battered and bruised this year with everything from falling stock and bond markets to misleading marketing probes, but a new study in Latin America highlights why now might be the best time to invest in the environmental, social and governance sector, writes Michael Molinski. Evidence shows that ESG funds act as a hedge against contagion in emerging markets, helping investors protect themselves from losses inflicted from abroad and profit in good markets. A handful of Latin American environmental stocks show why. . . .

Read the full story

Tuesday’s subscriber insights: Decarbonizing the chocolate way with Hershey

. . . . Sweet! Now you won’t have to feel so guilty about chomping down on that Hershey chocolate bar. The company said it has reduced emissions by 48% from a 2018 base, slashing Scope 1, 2 and 3 emissions from the business. Part of it was getting out of the coal game in India. And it’s been good for Hershey stock. To see how else they did it, read more here. . . .

. . . . Tucked in the middle of the big BloombergNEF report last week on electric vehicles, in an analysis of the battery metals market, was an interesting forecast that said increases in mining and changes to battery chemical mixes by automakers in response to high prices would curtail the sizzling rally metals for now. The analysis matches a similar call by Goldman Sachs two weeks ago to everyone’s surprise. Does two make a trend? Read more here. . . .

. . . . If you thought filling your car with gas was expensive, thank your lucky stars you weren’t driving a diesel vehicle. With the average gallon now around $6, haulers of every stripe are looking for alternatives, mostly focused on electric power. We bring you up to date. Read more here. . . .

. . . . Ford CEO Jim Farley has been notable for his push to EVs, particularly the headline-grabbing F-150 Lightning pickup truck. But now he is going against industry orthodoxy by predicting an EV price war at the same time as manufacturers are bemoaning the shortage of components. Who’s right? Is it a matter of timing? Read more. . . .

. . . . New things are invented and brought on board to fight pollution, but increasingly they become part of the problem. Expired EV batteries, tired solar panels and, now, wind turbine blades. And now recycling them is becoming an industry in itself. Read more. . . .

. . . . Fossil fuel emissions are probably the last thing on the mind of UK Prime Minister Boris Johnson’s administration this week, what with the vote of confidence and all. But this smart piece by Saphora Smith of The Independent about Chancellor Rishi Sunak’s plan two weeks ago to grant tax breaks to new oil projects said they will more than double the UK’s fossil fuel emissions in the next few years. Can we vote too? . . .

Editor’s picks: Hawaiian youths sue state over emissions

BAM! New Zealand banned all new oil and gas development. Now they're looking to go 100% #renewable.

We have solutions to the #climatecrisis, implement them. #ActOnClimate#climateaction #climate #energy #renewable
#BuildBackBetter #ItCanBeDone pic.twitter.com/5pA0JWq3m1

— Mike Hudema (@MikeHudema) June 4, 2022

Young Hawaiians sue state over emissions

Fourteen Hawaii youths, ages 9 to 18, from five islands, are suing the state’s Department of Transportation in federal court, alleging its operation of a transportation system that results in high levels of greenhouse gas emissions is harming their communities and violating their constitutional right to a clean and healthful environment. According to a report from the Honolulu Star Advertiser, in the case titled Navahine F. v. Hawaiʻi Department of Transportation, the young plaintiffs claim that their state DOT’s active operation of a transportation system that results in high levels of greenhouse gas emissions is causing significant harm to their communities, violates their constitutional rights, and undermines their ability to “live healthful lives in Hawaiʻi now and into the future.” The report says “The youth are going to court to ensure the Hawaiʻi Department of Transportation follows through on the legal mandate, set by the state legislature, to decarbonize Hawaiʻi’s economy and achieve a zero emissions economy by 2045.” The defendants have not yet commented on the lawsuit.

June 8 is World Oceans Day

Tomorrow is World Oceans Day and the theme for this year’s UN observance is Revitalization: collective action for the ocean. According to the UN, the ocean, which covers more than 70% of Earth’s surface, “is our life source, supporting humanity’s sustenance and that of every other organism on earth. The ocean produces at least 50% of the planet’s oxygen, it is home to most of earth’s biodiversity, and is the main source of protein for more than a billion people around the world. Not to mention, the ocean is key to our economy with an estimated 40 million people being employed by ocean-based industries by 2030. … With 90% of big fish populations depleted, and 50% of coral reefs destroyed, we are taking more from the ocean than can be replenished. We need to work together to create a new balance with the ocean that no longer depletes its bounty but instead restores its vibrancy and brings it new life.”

Data driven: World has passed ‘peak agricultural land’

. . . . The world produces more food than ever, but the amount of land used for agriculture is now declining. That means we can feed more people while restoring wild habitat, Hannah Ritchie reports for Our World in Data. According to the report, humans have cleared one-third of the world’s forests and two-thirds of wild grasslands since the end of the last ice age. Expanding agriculture has been the biggest driver of the destruction of the world’s wildlands, the group says, noting that wild mammal biomass has declined by 85% in the past 50,000 years. But now, after millennia, we have passed the peak, and in recent years global agricultural land use has declined. There is now a global decoupling of agricultural land and food production. The Food and Agricultural Organization of the UN says global agricultural land has peaked while agricultural production has continued to increase strongly, even after this peak. The good news, according to the report, is that “this shows that feeding more people does not have to mean taking habitat away from other wildlife. This decoupling means that we can produce more while giving land back to nature at the same time.” But continued decline is not guaranteed. . . .

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